One legal expert said the ruling makes it "extremely difficult" for Israel to uphold its claim to the resort because to do so would "involve a monumental leap of the imagination to assume that the border suddenly loops backwards." But he also noted that the settlement was "not black and white."
Any attempt by Israel to retain the hotel would be totally unacceptable to Egypt and could precipitate a major crisis in the two countries' already unsteady relations, other experts said.
Even if Israel chooses not to dispute this point, implementation of the Taba verdict could be delayed by several other unresolved disagreements, officials said.
There is, for instance, no agreement yet on the question of compensation if the hotel is transferred to Egypt. In talks in Cairo last month, Israel asked Egypt to accept continued Israeli ownership of the hotel or, failing that, Israeli management of the resort complex, Egyptian officials said.
Such a concession would be difficult to make, however, because Egyptian laws stipulate that any foreign company in Egypt must be 51% Egyptian-owned and employ Egyptians in 90% of its work force.
The possibility of Egypt buying the hotel outright has also been discussed, but no agreement seems near on a purchase price.
Williams reported from Jerusalem and Ross from Cairo.